EXHIBIT 10.01
(AMENDED)
ADVISORY AGREEMENT
by and among
KENMAR GLOBAL TRUST
a Delaware business trust
and
[THE ADVISOR]
a ____________ corporation
and
KENMAR ADVISORY CORP.
a Connecticut corporation
Effective as of ___________, 1996
Initial Allocation $____________
ADVISORY AGREEMENT
Table of Contents
Page
1. Undertakings of the Trading Advisor. . . . . . . . . . . . . . . 1
2. Duties of Trading Advisor. . . . . . . . . . . . . . . . . . . . 3
3. Allocation and Reallocation of Assets;
Designation of Additional Trading Advisors;
Charges to Allocated Assets. . . . . . . . . . . . . . . . . . 6
4. Trading Advisor Independent. . . . . . . . . . . . . . . . . . . 7
5. Commodity Broker; Floor Brokers. . . . . . . . . . . . . . . . . 7
6. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Term and Termination . . . . . . . . . . . . . . . . . . . . . . 8
8. Right to Advise Others; Uniformity of
Acts and Practices . . . . . . . . . . . . . . . . . . . . . . 9
9. Speculative Position Limits. . . . . . . . . . . . . . . . . . . 11
10. Representations and Warranties . . . . . . . . . . . . . . . . . 11
11. Indemnification; Limitation of Liability . . . . . . . . . . . . 15
12. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 19
13. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14. Amendment; Waiver. . . . . . . . . . . . . . . . . . . . . . . . 19
15. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
17. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 20
18. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . 20
19. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
20. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . 21
21. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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22. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 21
23. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
24. Third-Party Beneficiary. . . . . . . . . . . . . . . . . . . . . 21
25. "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . 22
26. Multi-Programs . . . . . . . . . . . . . . . . . . . . . . . . . 22
Annex A -- Trading Authorization . . . . . . . . . . . . . . . . . . A-1
Annex B -- Commodity Interests Traded by the Advisor . . . . . . . . B-1
Annex C -- Fee Calculations. . . . . . . . . . . . . . . . . . . . . C-1
Annex D -- Selection of Multiple Programs Offered. . . . . . . . . . D-1
Acknowledgment of Receipt of
Disclosure Document. . . . . . . . . . . . . . . . . . . . . . . . ACK-1
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ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT ("Agreement"), made as of the date set
forth on the cover hereof (the "Effective Date"), by and among KENMAR GLOBAL
TRUST (the "Trust"), [THE ADVISOR] (the "Trading Advisor") and KENMAR
ADVISORY CORP. ("Kenmar").
W I T N E S S E T H:
WHEREAS, the Trust has been formed to engage in the business of
trading, buying, selling or otherwise acquiring, holding or disposing of
futures contracts, forward contracts, foreign exchange commitments, swaps,
exchange for physicals, spot (cash) commodities, hybrid instruments, and
other items, any rights pertaining thereto and any options thereon and
engaging in all activities incident thereto (the foregoing forms of trading
being collectively referred to herein as "commodity interests");
WHEREAS, the Trust anticipates offering its Units of Beneficial
Interest ("Units") for sale to investors, as described in the Trust's
Registration Statement and Prospectus (the "Prospectus");
WHEREAS, from time to time during the Trust's operations, Kenmar,
the Trust's managing owner, may allocate and reallocate the Trust's assets
among the Trust's current or replacement trading advisors for management as
described in the Prospectus;
WHEREAS, the Trading Advisor is engaged in the business of, among
other things, making trading decisions on behalf of investors in the trading
of certain commodity interests; and
WHEREAS, the Trust desires the Trading Advisor, upon the terms and
conditions set forth herein, to act as a trading advisor for the Trust and to
make commodity interest trading decisions for the Trust with respect to the
assets of the Trust allocated to the Trading Advisor for management (the
"Allocated Assets") -- which shall include no "notional equity" -- and the
Trading Advisor desires to act in such capacity.
NOW, THEREFORE, in consideration of the premises and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Undertakings of the Trading Advisor
(a) To Furnish Information. The Trading Advisor agrees to make
all disclosures reasonably requested by Kenmar regarding the Trading Advisor
and its trading performance, strategies and accounts (subject to the need to
preserve the
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secrecy of proprietary information concerinng such strategies and of the
identity of the Trading Advisor's clients), to be included in disclosures
made by the Trust to its investors or for any other purposes relating to the
operation of the Trust.
The Trading Advisor shall cooperate, to the extent that Kenmar may
reasonably request, in preparing offering materials, investor information
reports and regulatory filings relating to the Trust. Any written reference
(other than periodic reports which the Commodity Futures Trading Commission
requires to be distributed to Unitholders) to the Trading Advisor or its
strategies shall be approved by the Trading Advisor prior to general
distribution by the Trust or Kenmar.
(b) To Furnish Updated Performance Information. The Trading
Advisor, at its own expense, shall promptly provide the Trust and Kenmar,
upon request, with a table or tables (in form and substance consistent with
all applicable regulations) reflecting the actual performance, on a monthly
basis, of all customer accounts directed by the Trading Advisor pursuant to
the ___ Program up to the latest practicable month-end date.
(c) To Notify of Changes. If the Trading Advisor shall become
aware of (i) any misleading statement or any untrue statement of a material
fact or any omission to state a material fact necessary to make the
statements contained in the disclosures made by the Trust to its investors
(relating to the Trading Advisor or its strategies), in light of the
circumstances under which such statements were made, not misleading, or (ii)
the occurrence of any event or change in circumstances which shall have
resulted or could reasonably be expected to result in there being any such
misleading or untrue statement or omission, the Trading Advisor shall
promptly notify the Trust in writing and shall cooperate with the Trust and
Kenmar in the preparation of any amended or supplemental disclosures
reasonably requested by Kenmar.
The Trading Advisor will promptly notify the Trust and Kenmar of
any material change in the management, ownership, personnel, organizational
structure or control of the Trading Advisor or a material adverse change in
the financial condition of the Trading Advisor that, in the reasonable
judgment of the Trading Advisor, could adversely impact its ability to
perform hereunder.
(d) Not to Distribute Information Concerning the Trust. None of
the Trading Advisor or any of its directors, shareholders, members, partners,
unitholders, officers, employees, agents and controlling persons ("Related
Parties") shall publish, circulate, or distribute any information relating to
the Trust or Kenmar or any of their respective affiliates, other than in the
context of the preparation of the Trading Advisor's performance tables as
required by applicable law or
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regulation. The Trading Advisor may also circulate performance information
relating to the Trust account managed by the Trading Advisor so long as none
of the Trust, Kenmar, or any of their respective affiliates are named.
(e) Not to Solicit Investors. None of the Trading Advisor or
any Related Party shall: (i) knowingly use or distribute for any purpose
whatsoever any list containing the names and/or residence addresses of and/or
other information relating to the Unitholders or (ii) knowingly contact any
current or former Unitholder for any purpose whatsoever unless such
Unitholder shall have first contacted the Trading Advisor or is an existing
client of the Trading Advisor or a Related Party of the Trading Advisor, or a
prospective client with which the Trading Advisor or a Related Party of the
Trading Advisor has commenced discussions.
(f) To Provide Access to Books and Records. Upon two (2) business
days' notice to the Trading Advisor, the Trust or Kenmar shall have the
right, during normal business hours at the Trading Advisor's offices, to have
access to and to inspect and copy such books and records relating to the
Trading Advisor and its trading as are reasonably necessary to verify the
accuracy and completeness of the data furnished by the Trading Advisor
pursuant to this Section 1 of this Agreement or otherwise to verify
compliance with the terms of this Agreement (subject to the need to preserve
the secrecy of such information and of the identity of the Trading Advisor's
clients). Such right of inspection shall terminate upon the termination of
this Agreement and shall not include any right to access computer programs,
records or other information used in determining trading decisions.
The Trading Advisor shall not be required to disclose the actual
trading results of the proprietary accounts of the Trading Advisor or its
principals except upon the request of the Trust or Kenmar for good cause
given.
(g) To Purchase Units. The Trading Advisor agrees to make (or
cause an affiliate to make) as of the Effective Date and maintain during the
term of this Agreement an investment of 500 Units.
2. Duties of Trading Advisor
(a) Trading the Allocated Assets; Trading Policies. Except as
otherwise provided in this Section 2, the Trading Advisor shall, commencing
on the Effective Date, have sole and exclusive authority and responsibility
for directing the trading of the Allocated Assets in commodity interests
pursuant to and in accordance with the Trading Advisor's best judgment and
its ___ Trading Program as described in the Prospectus and sales brochure,
or, if no such material is furnished by the Trust
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to its investors, as described in the information concerning the Trading
Advisor furnished by it in writing to the Trust, as such strategy may be
refined and modified from time to time in the future in accordance herewith,
for the period and on the terms and conditions set forth herein and in
accordance with the Trust's trading policies as notified to the Trading
Advisor in writing by the Trust from time to time (the "Trading Policies").
Notwithstanding the foregoing, the Trust may override the trading
instructions of the Trading Advisor to the extent that Kenmar deems advisable
for the protection of the Trust or as required by law. Kenmar shall have the
right: (i) to, subject to Section 3(a), increase or decrease (including
decrease to $0) the Allocated Assets as Kenmar and/or the Trust deems
appropriate (in which case the Trading Advisor shall modify accordingly its
positions commensurate with its risk/money management parameters); and/or
(ii) to instruct the Trading Advisor to liquidate all or a portion of the
Trust's positions by a date certain (including immediately) as Kenmar and/or
the Trust deems appropriate; provided, that the Trading Advisor, after
consultation with Kenmar, shall have the right to have instructions pursuant
to clause (ii) effected as a reduction (withdrawal) of Allocated Assets.
Subject to the Trading Advisor's liability for negligence, misconduct or
breach of this Agreement, the Trading Advisor will have no liability merely
by reason of Kenmar's intervention pursuant to this Section 2(a). In the
event that the Trust's Trading Policies are changed, any open positions at
the time of such change shall not be deemed to violate the revised Trading
Policies and shall be closed out by the Trading Advisor in the ordinary
course of trading.
The Trading Advisor, in its discretion, may alter the trading
approach used by the Trading Advisor in managing the Allocated Assets;
provided that the Trading Advisor determines that such alteration is in the
best interest of the Trust and not inconsistent with the Trading Policies;
and provided further that the Trading Advisor gives the Trust twenty (20)
calendar days' prior written notice of any alteration which the Trading
Advisor considers to be material. The Trust may instruct the Trading Advisor
not to make any material alteration in the trading strategy used for the
Allocated Assets, in which case the Trading Advisor may terminate this
Agreement pursuant to Section 7(b)(iii) hereof.
Any notices of material changes in trading approach required
hereunder shall be subject to reasonable assurances of confidentiality and
need not disclose any proprietary information concerning the nature of such
material change. The addition and/or deletion of markets or commodity
interests from the Trust's portfolio managed by the Trading Advisor shall not
be deemed a change in the Trading Advisor's strategy, and prior written
notice to the Trust shall not be required therefor, unless the Trading
Advisor's strategy used for the Trust is
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limited to a specific group of contracts or a market sector in a manner
inconsistent with such addition or deletion.
The Trading Advisor is in no respect making any guaranty to the
Trust of profits or of protection against loss. All purchases and sales of
commodity interests hereunder shall be for the account and risk of the Trust,
and the Trading Advisor shall not incur liability for trading losses
resulting therefrom, except as otherwise provided herein.
The Trading Advisor shall have no liability to the Trust or Kenmar
for any loss, damages, cost or expense arising out of or related to the use
of the Commodity Broker, or for payment of any fees, costs or expenses
associated with the services provided by it, all of which shall be the
responsibility of the Trust. The Trust shall be responsible for assuring the
payment of all margins, premiums, commissions and other amounts due to the
Commodity Brokers (as defined in Section 5 below).
The Trading Advisor and Kenmar may mutually agree in a separate
writing sent by Kenmar to the Trading Advisor and without need of amending
this Agreement to select a different program offered by the Trading Advisor
to be used for the Trust.
(b) Investment of Assets Held in Securities and Cash. The Trust,
and not the Trading Advisor, shall have the sole and exclusive authority and
responsibility with regard to the investment, maintenance and management of
the Trust's assets other than in respect of the Trading Advisor's trading of
the Allocated Assets in commodity interests.
(c) Trading Authorization. Prior to the Trust's acceptance of
trading advice from the Trading Advisor in accordance with this Agreement,
the Trust shall deliver to the Trading Advisor a trading authorization in the
form of Annex A hereto appointing the Trading Advisor as the Trust's agent
and attorney-in-fact for such purpose.
The Trust shall instruct its brokers to furnish to the Trading
Advisor copies of all trade confirmations and monthly statements relating to
the Allocated Assets. The Trading Advisor will maintain a record of all such
statements and monitor the open positions in the Trust's account.
(d) Delivery of Disclosure Document. The Trading Advisor shall,
during the term of this Agreement, deliver to the Trust copies of all
disclosure documents filed by the Trading Advisor with any governmental
authority, promptly following such filing.
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(e) List of Commodity Interests Traded by the Trading Advisor.
All commodity interests other than regulated futures contracts and options on
regulated futures contracts traded on a designated board of trade or exchange
in the United States and foreign futures and options contracts as approved by
the CFTC as stated in the most recent CFTC Backgrounder shall be listed on
Annex B to this Agreement. The addition of commodity interests (other than
forward contracts on foreign currencies) to the Trust's portfolio managed by
the Trading Advisor as set forth in Annex B to this Agreement shall require
prior written notice to the Trust.
The Trading Advisor agrees to trade only in commodity interests
that the Trading Advisor considers to be traded in sufficient volume to
permit the Trading Advisor readily to acquire and liquidate positions on
behalf of the Trust.
The Trading Advisor will not trade any securities (including
without limitation options on securities indices).
(f) Trade Reconciliations. The Trading Advisor acknowledges its
obligation to review the Trust's positions in the account managed by the
Trading Advisor on a daily basis and promptly to notify Kenmar and the Trust
of any errors committed by the Trading Advisor or any trade which the Trading
Advisor believes was not executed in accordance with its instructions.
The Trading Advisor will use its best efforts to send Kenmar copies
of all trades made by the Trading Advisor on behalf of the Trust, by
facsimile or other means, by 5:00 p.m. (New York time) on the day that such
trades are made.
3. Allocation and Reallocation of Assets;
Designation of Additional Trading
Advisors; Charges to Allocated Assets
(a) Allocation and Reallocation of Assets; Designation of
Additional Trading Advisors. The initial amount of the Allocated Assets
shall be the amount set forth on the cover of this Agreement, none of which
shall constitute "notional funds." This initial amount shall be deposited at
the Trust's Commodity Broker (as defined in Section 5 hereof) on the
Effective Date, available for trading by the Trading Advisor. The Trust may
at any time and from time to time in its sole discretion: (i) reallocate the
Trust's assets, including a portion of the Trading Advisor's Allocated
Assets, among the various other trading advisors for the Trust, including the
Trading Advisor; and/or (ii) designate additional trading advisors for the
Trust, and allocate to such additional trading advisors the management of
such portion of the Trust's assets, including a portion of the Allocated
Assets, as the Trust shall determine.
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The Trading Advisor agrees, upon one (1) business day's prior
notice, to accept additional allocations of Trust assets for management, from
time to time, provided that the Net Asset Value of the Allocated Assets may
not exceed $20,000,000 as of any month-end without the Trading Advisor's
prior consent.
Subject to its obligations to its Unitholders, the Trust will
endeavor to make all allocations and re-allocations only as of the beginning
of a month.
(b) Charges to Allocated Assets. The Trading Advisor understands
and agrees that: (i) the full amount of the Profit Share and execution costs
(other than floor brokerage, exchange, clearing and NFA fees ("Brokerage
Commissions")) allocable to the Allocated Assets shall be charged to the
Allocated Assets; (ii) Brokerage Commissions and other expenses (not
including distributions or redemptions) payable by the Trust shall be
allocated to the Allocated Assets pro rata based on the relative month-end
equity of the accounts managed by each of the Trust's trading advisors; and
(iii) interest income earned on the Trust's assets shall be allocated pro
rata among the accounts managed by each of the Trust's trading advisors, as
provided in clause (ii).
4. Trading Advisor Independent
For all purposes of this Agreement, the Trading Advisor shall be
deemed to be an independent contractor and, unless otherwise expressly
provided herein or with the prior written authorization of the Trust, the
Trading Advisor shall have no authority to act for or represent the Trust in
any way and shall not otherwise be deemed to be an agent of the Trust.
Except as otherwise specifically provided herein, nothing in this Agreement
shall be deemed to confer on any of the foregoing any express, implied, or
apparent authority to incur any obligation or liability on behalf of any
other. Nothing contained herein shall create or constitute the Trading
Advisor, any other trading advisor for the Trust, the Trust or Kenmar as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity.
The parties acknowledge that the Trading Advisor has not been an
organizer or promoter of the Trust.
5. Commodity Broker; Floor Brokers
(a) Commodity Broker. Except as contemplated by Section 5(c) of
this Agreement, the Trading Advisor shall place orders for all commodity
interest transactions executed by the Trading Advisor for the Trust through
such commodity broker or brokers as the Trust shall designate from time to
time in its sole discretion -- the Trust initially so designating ING (U.S.)
Securities, Futures & Options Inc. (the "Commodity Broker";
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collectively with other commodity brokers which may be selected for the
Trust, the "Commodity Brokers"). The parties acknowledge that the Trading
Advisor has no authority or responsibility for the Trust's selection of the
Commodity Broker or for the negotiation of the Trust's Brokerage Commission
rate, and is not responsible for the execution and clearance of the Trust's
trades once complete orders have been transmitted to the Commodity Broker or
a floor broker approved by Kenmar or the Trust.
(b) Brokers. The Trading Advisor shall place orders for all
forward currency transactions, to be executed by the Trading Advisor for the
Trust, through the Commodity Broker. Notwithstanding Section 5(a) of this
Agreement, the Trading Advisor may place orders for commodity interest
transactions for the Trust through floor brokers selected by the Trading
Advisor, and approved by the Trust, such approval not to be unreasonably
withheld. Such floor brokers shall "give up" all Trust trades to the
Commodity Broker for clearance.
The brokerage and floor commissions, "give-up" fees and other
transaction costs charged by any floor broker, other than the Commodity
Broker, to effect Trust transactions shall be subject to the approval of
Kenmar, such approval not to be unreasonably withheld provided that such fees
and transaction costs are competitive with the Commodity Broker's standard
rates. The Trading Advisor shall use its reasonable best efforts to (i) cause
and (ii) assist Kenmar in causing any broker other than the Commodity Broker
to correct all trading errors or omissions relating to transactions executed
in respect of the Allocated Assets by any such broker.
6. Fees
(a) Profit Share; Consulting Fee. For the advisory services
contemplated by this Agreement, the Trust shall pay to the Trading Advisor a
quarterly Profit Share and Kenmar shall pay to the Trading Advisor a monthly
Consulting Fee, in each case calculated as set forth in Annex C.
(b) No Share in Commissions. Without the express written consent
of the Trust, neither the Trading Advisor nor any related party shall receive
or accept, whether in the form of rebates or otherwise, (i) any share of the
brokerage, floor, or clearinghouse commissions or fees or other transaction
costs paid by the Trust to any commodity broker or floor broker, or (ii) any
form of compensation or remuneration from any executing or clearing broker
used by the Trust.
7. Term and Termination
(a) Term and Renewal. This Agreement shall continue in effect
until the end of the fourth full calendar quarter after the Effective Date.
Thereafter, this Agreement shall be
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renewable, at the option of the Trust, on the same terms for up to two (2)
additional twelve-month periods.
(b) Termination. Notwithstanding Section 7(a) hereof, this
Agreement shall terminate:
(i) immediately if (a) the Trust shall terminate; (b) at the
option of the Trust if ________ shall no longer the employed by the Trading
Advisor, or (c) at the option of the Trust if the performance record of the
Trading Advisor is negatively restated in any material respect.
(ii) at the discretion of the Trust, upon ten (10) days' notice to
the Trading Advisor, as of the end of any calendar month;
(iii) at the discretion of the Trading Advisor, (a) immediately
should the Trading Advisor notify the Trust pursuant to Section 2(a) of a
proposed material change to the strategies to be used in managing the
Allocated Assets and either (i) the Trust has instructed the Trading Advisor
not to implement such changes or (ii) the twenty (20) day period set forth in
Section 2(a) has lapsed; (b) upon twenty (20) days' notice to the Trust, as
of any month-end if the Trading Advisor has determined to cease managing any
customer accounts pursuant to the same strategy as the Trading Advisor has
been retained to employ on behalf of the Trust; or (c) upon twenty (20) days'
notice to the Trust, as of any month-end should the Allocated Assets have a
Net Asset Value, as of the close of business on any day, of less than
$500,000 (any such termination to be made at the first available month-end
after the event giving rise to the termination right or such right to be
waived); or
(iv) immediately at the discretion of the Trust or the Trading
Advisor, as the case may be, in the event that the Trading Advisor, on the
one hand, or the Trust or Kenmar, on the other, is in material breach of any
provision hereof.
Any non-renewal of this Agreement pursuant to Section 7(a) or any
termination of this Agreement pursuant to clauses 7(b)(i), (b)(ii) or
(b)(iii), above, shall be without penalty or liability to any party.
8. Right to Advise Others; Uniformity of
Acts and Practices
During the term of this Agreement, the Trading Advisor and its
affiliates shall be free to advise other investors as to the purchase and
sale of commodity interests, to manage and trade other investors' commodity
interest accounts, and to trade for and on behalf of their own proprietary
commodity interest accounts. The compensation which the Trading Advisor
receives from other accounts may be more or less than that received from
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the Trust. However, under no circumstances shall the Trading Advisor or any
of its affiliates knowingly or deliberately favor any commodity interest
account directed by any of them over the Trust's account in any way or
manner, provided that trading different portfolios for other accounts,
trading other accounts at different leverage, or charging different fees to
different accounts shall not be considered to constitute favoring such
accounts over the Trust's account. The Trading Advisor and its affiliates
also shall not be deemed to be favoring another commodity interest account
over the Trust's account if the Trading Advisor or his or its affiliates, in
accordance with specific instructions of the owner of such account, shall
trade such account at a degree of leverage or in accordance with trading
policies which shall be different from that which would normally be applied
or if the Trading Advisor or its affiliates, in accordance with the Trading
Advisor's money management principles, shall not trade certain commodity
interest contracts for an account based on the amount of equity in such
account.
The Trading Advisor agrees that in the event the Trading Advisor
determines to trade or is now trading another client commodity interest
account pursuant to a trading approach materially different from the trading
approach utilized by the Trading Advisor in trading on behalf of the Trust,
the Trading Advisor will disclose such trading approach to the Trust, subject
to reasonable assurances of confidentiality, and will, if the Trust so
elects, utilize any such trading approach in trading the Allocated Assets in
the future, provided that the Trading Advisor shall not hereby be required to
use, on behalf of the Trust, any approach used solely in trading,
experimental or proprietary accounts or any approach which the Trading
Advisor reasonably believes to be inappropriate for the Trust's account or
any approach which is trading at full capacity.
At the reasonable request of the Trust and to the extent that they
are available without undue expense or burden, the Trading Advisor shall make
available to the Trust copies of the daily, monthly, quarterly, and annual,
as the case may be, written reports prepared by the Trading Advisor in the
ordinary course, reflecting the performance of all commodity pool accounts
advised, managed, owned or controlled by the Trading Advisor and account
statements reflecting the performance of all other pools and commodity
interest accounts advised, managed, owned, or controlled by the Trading
Advisor, in each case which implement the same strategy used for the Trust
(with the names of clients deleted). At the reasonable request of the Trust,
the Trading Advisor shall provide to the Trust an explanation of the
differences, if any, in the performance between the Trust's account and such
other accounts (subject to the need to preserve the secrecy of proprietary
information concerning the Trading
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Advisor's strategies and the identity of the Trading Advisor's clients).
9. Speculative Position Limits
(a) Limits Applicable to Trading Advisor. The Trading Advisor
agrees that in the event the Trading Advisor exceeds speculative position
limits in respect to the Trading Advisor's commodity interest trading, the
Trading Advisor will liquidate positions as necessary to comply with
applicable speculative position limits in all of the Trading Advisor's
outstanding accounts in such manner as the Trading Advisor deems to be fair
and equitable. The Trading Advisor agrees that in the event that any such
liquidation becomes necessary, the Trading Advisor will so inform the Trust
and will report to the Trust the steps taken by the Trading Advisor in order
to comply with all applicable speculative position limits.
The Trading Advisor represents and warrants that existing
speculative position limits will not materially adversely affect the Trading
Advisor's ability to manage the Trust's account, provided that such account
does not exceed $20,000,000, as contemplated by Section 3(a) hereof.
(b) Notice That Limits Exceeded. If the Trading Advisor at any
time shall become aware that the positions in any commodity interest owned,
held, or controlled by the Trading Advisor exceed the applicable speculative
position limit allocable to the Trading Advisor, the Trading Advisor shall
promptly notify the Trust of that fact in writing.
The Trading Advisor shall promptly notify the Trust if speculative
position limits may reasonably be expected to require material alteration of
the strategies used in managing the Trust's account.
(c) Liquidation of Positions to Comply with Limits. If limits are
exceeded by the Trust, the Trust shall instruct the Trading Advisor as to
whether any liquidation of Trust positions managed by the Trading Advisor is
required.
10. Representations and Warranties
(a) The Trading Advisor represents and warrants to the Trust and
Kenmar as follows:
(i) The Trading Advisor is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated. The Trading Advisor
has full corporate power and authority to perform its
obligations and to direct the Trust's trading, as described in
the Prospectus and sales brochure
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and to discharge its obligations under this Agreement and is
qualified to conduct its business as a foreign corporation and
is in good standing in every jurisdiction in which the nature or
conduct of its business requires such qualification and failure
to so qualify would have a material adverse effect on its ability
to comply with, or perform its obligations under this Agreement.
(ii) The references to the Trading Advisor, its
principal(s) and its trading strategies in the Prospectus and
sales brochure do not contain any material misstatements or
omissions. The Trading Advisor's Disclosure Document complies
in all material respects with the Commodity Exchange Act and
the regulations of the Commodity Futures Trading Commission.
(iii) The Prospectus and sales brochure, as to the
Trading Advisor, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
(iv) This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Trading
Advisor and constitutes the binding and enforceable
obligation of the Trading Advisor in accordance with its
terms.
(v) The Trading Advisor and its principals each has all
governmental, regulatory and exchange licenses and approvals
and has effected all filings and registrations with
governmental and regulatory agencies required to conduct its
business and to act as described in the Prospectus and sales
brochure or required to perform its obligations under this
Agreement (including, without limitation, registration of the
Trading Advisor as a commodity trading advisor under the
Commodity Exchange Act and membership of the Trading Advisor
as a commodity trading advisor in the National Futures
Association).
(vi) The execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein and in
the Prospectus and sales brochure will not constitute a breach
of, or default under, the Articles of
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Incorporation or By-laws or other organizational documents of the
Trading Advisor, or under any instrument by which the Trading
Advisor or any of its principals is bound or under any order, rule
or regulation applicable to the Trading Advisor or any of its
principals, of any court or any governmental body or administrative
agency having jurisdiction over the Trading Advisor or such
principal(s).
(vii) The Trading Advisor's provision of management services
as contemplated hereby will not violate the Investment Advisers Act
of 1940.
(viii) There is not pending nor, to the best of the Trading
Advisor's knowledge threatened, any action, suit or proceeding
before or by any court or other governmental body to which the
Trading Advisor or any of its principals is a party, or to which
any of the assets of the Trading Advisor or any of its principals
is subject, which might reasonably be expected to result in any
material adverse change in the condition, financial or otherwise,
business or prospects of the Trading Advisor or any of its
principals. Neither the Trading Advisor nor any of its principals
has received any notice of an investigation regarding
non-compliance by the Trading Advisor or such principals with
applicable law.
(ix) As a condition precedent to the allocation of the
Allocated Assets to the Trading Advisor, the Trading Advisor agrees
to furnish to the Trust such opinions and certificates as the Trust
may reasonably request.
(b) Kenmar represents and warrants to the Trading Advisor and the
Trust as follows:
(i) Kenmar is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Connecticut. Kenmar has full corporate power and authority to
perform its obligations as described in the information
furnished by Kenmar for distribution to Unitholders and to
discharge its obligations under this Agreement and is
qualified to conduct its business as a foreign corporation and
is in good standing in every jurisdiction in which the nature
or conduct of its business requires such qualification and
failure to so qualify would have a material adverse effect on
its ability to comply with, or perform its obligations under
this Agreement.
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(ii) The references to Kenmar and its principals in the
information furnished by Kenmar to Unitholders do not contain
any material misstatements or omissions.
(iii) This Agreement has been duly and validly
authorized, executed and delivered on behalf of Kenmar and
constitutes the binding and enforceable obligation of Kenmar
in accordance with its terms.
(iv) Kenmar and its principals each has all United
States governmental, regulatory and exchange licenses and
approvals and has effected all filings and registrations with
governmental and regulatory agencies required to conduct its
business and to act as described in the information furnished
by Kenmar for distribution to Unitholders or required to
perform its obligations under this Agreement (including,
without limitation, registration of Kenmar as a commodity pool
operator under the Commodity Exchange Act and membership of
Kenmar as a commodity pool operator in the National Futures
Association).
(v) The execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein and in
the information furnished by Kenmar for distribution to
Unitholders will not constitute a breach of, or default under,
the organizational documents of Kenmar, or under any
instrument by which Kenmar or any of its principals is bound
or under any order, rule or regulation applicable to Kenmar or
any of its principals, of any court or any governmental body
or administrative agency having jurisdiction over Kenmar or
such principals.
(vi) There is not pending nor, to the best of Kenmar's
knowledge threatened, any action, suit or proceeding before or
by any court or other governmental body to which Kenmar or any
of its principals is a party, or to which any of the assets of
Kenmar or any of its principals is subject, which might
reasonably be expected to result in any material adverse
change in the condition, financial or otherwise, business or
prospects of Kenmar or any of its principals. Neither Kenmar
nor any of its principals has received any notice of an
investigation regarding
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non-compliance by Kenmar or such principals with applicable law.
(c) The Trust hereby represents and warrants to Kenmar and the
Trading Advisor as follows:
(i) The Trust is duly organized pursuant to and validly
existing under the laws of the State of Delaware, with full
power and authority to engage in the activities as described
in the Prospectus.
(ii) The Trust has full power and authority under
applicable law to perform its obligations under this
Agreement.
(iii) This Agreement has been duly and validly
authorized, executed and delivered by the Trust and
constitutes binding and enforceable obligations of the Trust
in accordance with its terms.
(iv) The execution and delivery of this Agreement, the
incurrence of the obligations set forth herein and the
consummation of the transactions contemplated herein will not
constitute a breach of, or default under, the Certificate of
Trust or the Declaration of Trust and Trust Agreement of the
Trust, or any instrument by which the Trust is bound or any
order, rule or regulation applicable to the Trust of any court
or any governmental body or administrative agency having
jurisdiction over the Trust.
(v) The Trust does not require any governmental,
regulatory or exchange approvals or licenses, nor need it
effect any filings or registrations with any federal, state or
other governmental agencies in order to conduct its business
and to act as contemplated by this Agreement.
(d) The foregoing representations and warranties shall be
continuing, and if any of them shall cease to be true and accurate in all
material respects, the affected party shall promptly give notice to such
effect to all other parties hereto.
11. Indemnification; Limitation of Liability.
The Trust shall indemnify, defend and hold harmless the Trading
Advisor and its Related Parties from and against any and all losses, claims,
damages, liabilities (joint and several), costs and expenses (including any
investigatory, legal and other
-15-
expenses incurred in connection with, and any amounts paid in, any
settlement; provided that the Trust shall have approved such settlement)
resulting from a demand, claim, lawsuit, action or proceeding relating to (i)
any of such indemnified person's actions or capacities relating to the
business or activities of the Trust, (ii) any activities of the Trust, and
(iii) any Trust-related activities of Kenmar, or any other trading advisor to
the Trust; provided that the conduct (if any) of the Trading Advisor or its
Related Parties which was the subject of the demand, claim, lawsuit, action
or proceeding did not constitute negligence, misconduct or a breach of this
Agreement and was done in good faith and in a manner such person reasonably
believed to be in, or not opposed to, the best interests of the Trust and
provided, further, that the demand, claim, lawsuit or proceeding did not
arise from any untrue statement of a material fact or omission of a material
fact contained in the Prospectus, the sales brochure or any written reference
to the Trading Advisor which was necessary to make the statements contained
therein, in light of the circumstances in which they were made, not
misleading, and which was approved by the Trading Advisor pursuant to Section
1(a) above. The termination of any demand, claim, lawsuit, action or
proceeding by settlement shall not, in itself, create a presumption that the
conduct in question constituted negligence or misconduct or was not
undertaken in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interests of the Trust.
In the event that the Trading Advisor or any related party is made
a party to any claim, dispute or litigation or otherwise incurs any loss or
expense as a result of, or in connection with, the Trust's activities or
claimed activities unrelated to the Trading Advisor, the Trust shall
indemnify, defend and hold harmless the Trading Advisor or such related party
against any loss, liability, damage, cost or expense (including, without
limitation, attorneys' and accountants' fees) incurred in connection
therewith.
The Trading Advisor shall indemnify, defend and hold harmless the
Trust and its Related Parties from and against any and all losses, claims,
damages, liabilities (joint and several), costs and expenses (including any
reasonable investigatory, legal and other expenses incurred in connection
with, and any amounts paid in, any settlement; provided that the Trading
Advisor shall have approved such settlement) resulting from a demand, claim,
lawsuit, action or proceeding relating to any action or omission of the
Trading Advisor relating to the business or activities of the Trading Advisor
under this Agreement or relating to the management by the Trading Advisor of
an account of the Trust if the action or omission of the Trading Advisor
which was the subject of the demand, claim, lawsuit, action or proceeding (i)
constituted negligence, misconduct or a breach of this Agreement, (ii) was an
action or omission taken otherwise than in good faith and in a manner
reasonably believed
-16-
to be in, or not opposed to, the best interests of the Trust or (iii)
constituted the making of an untrue statement of material fact or omission of
a material fact in the Prospectus, the sales brochure or any written
reference to the Trading Advisor which was necessary to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading, and which was approved by the Trading Advisor pursuant to Section
1(a) above.
In the event that the Trust or any related party is made a party to
any claim, dispute or litigation or otherwise incurs any loss or expense as a
result of, or in connection with, the activities or claimed activities of the
Trading Advisor or any related party unrelated to the Trust's business, the
Trading Advisor shall indemnify, defend and hold harmless the Trust or any of
its affiliates against any loss, liability, damage, cost or expense
(including, without limitation, attorneys' and accountants' fees) incurred in
connection therewith.
Except as otherwise provided in this Section 11, neither the
Trading Advisor nor its Related Parties shall be liable to any other party
hereto or any of the respective Related Parties except for the Trading
Advisor's liability for conduct constituting negligence or misconduct or a
breach of this Agreement or which was taken or omitted other than in good
faith and in the belief that such conduct was in, or not opposed to, the best
interest of the Trust.
In addition to and without limiting the foregoing, ____________
shall have no liability to the Trust or Kenmar or any of their respective
Related Parties under this Agreement or in connection with the transactions
contemplated by this Agreement except in the case of fraud or willful
misconduct by _____________.
No indemnification under this Section 11 shall be made in respect
of any demand, claim, lawsuit, action or proceeding relating to activities of
the person to be indemnified which have been adjudged, by a court, having
jurisdiction with respect to the matter upon entry of a final judgment, not
to have been done in good faith and in the reasonable belief that such
conduct was in, or not opposed to, the best interests of the Trust or to
constitute negligence, misconduct or a breach of this Agreement unless, and
except to the extent that, such court determines that, despite such judgment,
such person is fairly and reasonably entitled to indemnity.
Any indemnification required by this Section 11, unless ordered or
expressly permitted by a court, shall be made by the indemnifying party only
upon a determination by independent legal counsel selected by the
indemnifying party and agreed to by the indemnified party in a written
opinion that the conduct which is the subject of the claim, demand, lawsuit,
action or proceeding
-17-
with respect to which indemnification is sought meets the applicable standard
set forth in this Section 11; provided, however, that if the indemnified
party shall prevail on the merits and the defense of any demand, claim,
lawsuit or proceeding subject to indemnification hereunder, indemnification
shall be payable hereunder irrespective of the receipt of any such legal
opinion.
In the event that a person entitled to indemnification under this
Section 11, is made a party to an action, suit, or proceeding alleging both
matters for which indemnification may be due hereunder and matters for which
indemnification may not be due hereunder, such person shall be indemnified
only in respect of the former matters.
The Trust or the Trading Advisor, as the case may be, shall advance
indemnification payments reasonably asserted to be due hereunder, provided
that the putatively indemnified party which receives such advances undertakes
in writing to repay the advanced funds, without interest, in the event that
such recipient is determined not to be entitled to indemnification under this
Section 11.
Notwithstanding any provision of this Agreement to the contrary, in
respect of all losses, liabilities, claims, demands, damages, costs, and
expenses described above in this Section 11 (including legal, accounting, and
other expenses incurred in each connection therewith), the Trust's indemnity
obligation shall be limited to the net worth of the Trading Advisor as of the
time that any event giving rise for a claim to indemnity arose.
The foregoing agreements of indemnity shall be in addition to, and
shall in no respect limit or restrict, any other remedies which may be
available to an indemnified party under this Agreement.
Promptly after receipt by any of the indemnified parties under this
Agreement of notice of any demand, claim, lawsuit, action or proceeding, the
indemnified party shall notify the indemnifying party in writing of the
commencement thereof if a claim in respect thereof is to be made under this
Agreement, but the omission so to notify shall not relieve the indemnifying
party from any obligation or liability which it may have to any such
indemnified party otherwise than under this section. In case such demand,
claim, lawsuit, action or proceeding is brought against a person indemnified
under this Agreement, and the indemnifying party is notified of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that the indemnifying party may wish, to assume
the defense thereof, with counsel selected by the indemnifying party and
approved by the indemnified person (provided that approval may not be
unreasonably withheld), and after notice from the indemnifying party to such
indemnified person of the indemnifying
-18-
party's election so to assume the defense thereof, the indemnifying party
shall not be liable to such person under this section for any legal or other
expenses subsequently incurred by such person in connection with the defense
thereof, unless (i) the indemnifying party approves the employment of
separate counsel by such person, or (ii) the action has been brought against
both such person and the indemnifying party and such person's counsel has
advised it or him that it or he has legal defenses different from or in
addition to those of the indemnifying party (it being understood, however,
that the indemnifying party shall not be liable for legal or other expenses
of more than one separate firm of attorneys for all such persons indemnified
hereunder, which firm shall be designated in writing by the Trading Advisor
or the Trust, as the case may be).
12. Entire Agreement
This Agreement and the agreements referenced herein constitutes the
entire agreement between the parties hereto with respect to the matters
referred to herein, and no other agreement, verbal or otherwise, shall be
binding as between the parties unless it shall be in writing and signed by
the party against whom enforcement is sought.
13. Assignment
This Agreement shall not be assigned by any of the parties hereto
without the prior express written consent of the other parties hereto.
14. Amendment; Waiver
This Agreement shall not be amended except by a writing signed by
the parties hereto. No waiver of any provision of this Agreement shall be
implied from any course of dealing between the parties hereto or from any
failure by either party hereto to assert its rights hereunder on any occasion
or series of occasions.
15. Severability
If any provision of this Agreement, or the application of any
provision to any person or circumstance, shall be held to be inconsistent
with any present or future law, ruling, rule, or regulation of any court or
governmental or regulatory authority having jurisdiction over the subject
matter hereof, such provision shall be deemed to be rescinded or modified in
accordance with such law, ruling, rule, or regulation, and the remainder of
this Agreement, or the application of such provision to persons or
circumstances other than those as to which it shall be held inconsistent,
shall not be affected thereby; provided that alteration of this Agreement in
this manner shall not have a material effect on the terms hereof.
-19-
16. Notices
Any notice required or desired to be delivered under this Agreement
shall be in writing and shall be delivered by courier service, postage
prepaid mail, telex, facsimile, telegram, or other similar means and shall be
effective upon actual receipt by the party to which such notice shall be
directed, addressed as follows (or to such other address as the party
entitled to notice shall hereafter designate in accordance with the terms
hereof):
if to the Trust or Kenmar:
▇/▇ ▇▇▇▇▇▇ Advisory Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trading Advisor:
To the address notified in writing to the Trust from time to
time by the Trading Advisor
17. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
18. Consent to Jurisdiction
The parties hereto agree that any action or proceeding arising
directly, indirectly, or otherwise in connection with, out of, related to, or
from this Agreement, any breach hereof, or any transaction covered hereby,
shall be resolved, whether by arbitration or otherwise, within the City of
New York, State of New York. Accordingly, the parties consent and submit to
the jurisdiction of the federal and state courts and any applicable arbitral
body located within the City of New York, State of New York. The parties
further agree that any such action or proceeding brought by either party to
enforce any right, assert any claim, or obtain any relief whatsoever in
connection with this Agreement shall be brought by such party exclusively in
federal or state courts, or if appropriate before any applicable arbitral
body, located within the City of New York, State of New York.
-20-
19. Remedies
In any action or proceeding arising out of any of the provisions of
this Agreement, the parties hereto agree that they shall not seek any
prejudgment equitable or ancillary relief. Such parties also agree that
their sole remedy in any such action or proceeding shall be to seek actual
monetary damages for any breach of this Agreement; provided, however, that
the parties hereto agree that declaratory judgment may be sought with respect
to the indemnification provisions of this Agreement.
20. Confidentiality
The Trust and Kenmar acknowledge that the Trading Advisor's
strategies and trades constitute proprietary data belonging to the Trading
Advisor and agree that they will not disseminate any confidential information
regarding any of the foregoing, except as required by law, and any such
information as may be acquired by Kenmar or the Trust is to be used solely to
monitor the Trading Advisor's performance on behalf of the Trust.
The obligations of the parties in relation to confidentiality will
not apply to the extent that any information (i) is required to be disclosed
in accordance with any applicable law, rule, regulation or order of any
applicable court, arbitration panel, governmental, regulatory or
self-regulatory authority or any audit requirement or (ii) has entered into
the public domain other than by a breach of duty on the part of any party
hereto.
21. Survival
The provisions of this Agreement shall survive the termination
hereof with respect to any matter arising while this Agreement shall be in
effect.
22. Counterparts
This Agreement may be executed in counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
23. Headings
Headings to sections and subsections in this Agreement are for the
convenience of the parties only and are not intended to be a part of or to
affect the meaning or interpretation hereof.
24. Third-Party Beneficiary.
This Agreement is not intended to and shall not convey any rights
to persons not a party to this Agreement, except as provided in Section 11.
In particular, and not by way of
-21-
ilmitation, no investor in the Trust may assert any rights hereunder.
25. "Business Day." "Business day," as used herein, shall mean a
day on which banks are required or authorized to remain open for business in
New York City.
26. Multi-Programs. If the Trading Advisor offers more than one
trading program to clients, the program(s) to be used for the Trust, and the
additional allocation of the Allocated Assets to, between or among such
program(s), are set forth in Annex D hereto.
IN WITNESS WHEREOF, this Agreement has been executed for and on
behalf of the undersigned as of the Effective Date.
KENMAR GLOBAL TRUST
BY: KENMAR ADVISORY CORP.
Managing Owner
BY: ___________________________________
Name:
Title:
KENMAR ADVISORY CORP.
BY: ___________________________________
Name:
Title:
THE TRADING ADVISOR
BY: ___________________________________
Name:
Title:
-22-
Annex A
TRADING AUTHORIZATION
[TRADING ADVISOR]
To Whom It May Concern:
Kenmar Global Trust, a Delaware business Trust (the "Trust"), does
hereby make, constitute, and appoint [TRADING ADVISOR] as the Trust's
attorney-in-fact to buy and sell commodity interests, in accordance with the
Advisory Agreement among us and certain others.
This authorization shall terminate and be null, void, and of no
further effect simultaneously with the termination of the said Advisory
Agreement.
Very truly yours,
Dated as of _______, 199__
KENMAR GLOBAL TRUST
BY: KENMAR ADVISOR CORP.,
Managing Owner
By: ____________________________
Name:
Title:
ACCEPTED AND AGREED TO:
[TRADING ADVISOR]
By: ____________________________
Name:
Title:
A-1
Annex B
LIST OF
COMMODITY INTERESTS TRADED BY
[THE TRADING ADVISOR]
The undersigned represents that the following is a complete list of
commodity interests which the undersigned intends to trade on behalf of
KENMAR GLOBAL TRUST other than regulated futures contracts and options on
regulated futures contracts traded on a qualified board of trade or exchange
in the United States and foreign futures and options contracts approved by
the CFTC as stated in the most recent CFTC Backgrounder:
Contract Type
(Futures, Forward,
Options on Futures) Exchange Contract
-------------------- -------- --------
[TRADING ADVISOR]
By:_________________________
Name:
Title:
Dated as of ____, 199_
B-1
ANNEX C
FEE CALCULATIONS
Consulting Fee
For the advisory services contemplated by this Agreement, Kenmar
Advisory Corp. ("Kenmar") shall, at no additional cost to the Trust, remit to
the Trading Advisor, monthly in arrears, a Consulting Fee equal to 0.167 of 1%
of the Net Asset Value of the Allocated Assets as of the beginning of such
calendar month (a 2% annual rate).
Kenmar will remit the Consulting Fees due to the Trading Advisor
within fifteen (15) business days of the month-end as of which they are due.
At such time as Kenmar remits each monthly Consulting Fee payment hereunder
to the Trading Advisor, Kenmar shall also submit a reasonably itemized
statement setting forth the calculation of the amount due to the Trading
Advisor in respect of such month. If the Trading Advisor does not object to
such statement within ten (10) business days of the receipt thereof, such
statement shall for all purposes be deemed to be conclusively correct.
The Consulting Fee due to the Trading Advisor hereunder shall be
prorated for any partial month during which this Agreement is in effect, or
for any reallocations during a month, such proration to be made on the basis
of the number of business days during such month that the Trading Advisor
managed assets on which the Consulting Fee is being calculated hereunder,
compared to the total number of business days in such month. Termination of
this Agreement will be treated as if the termination date were a month-end
for purposes calculating the Consulting Fee.
Profit Share
As of the end of each calendar quarter, beginning with the end of
the first full calendar quarter after the Effective Date, the Trust will pay
the Trading Advisor a Profit Share equal to twenty percent (20%) of any
Trading Profit recognized in respect of the Allocated Assets during the
preceding quarter (or, in the case of the first calculation period, since the
Effective Date).
C-1
Trading Profit for purposes of calculating the Trading Advisor's
Profit Share includes, for any period, (i) the realized trading profit
(loss), plus or minus (ii) the change in unrealized trading profit (loss) on
open positions from the beginning to the end of such period, and is
calculated after reduction for the sum of __% plus execution costs other than
Brokerage Commissions. Trading Profit does not include interest credited on
the Trust's assets. New Trading Profit is generated only to the extent that
the Trading Advisor exceeds its previous calendar quarter-end high in
cumulative Trading Profit.
In the case of withdrawals from the Trading Advisor's Allocated
Assets, as of the end of any month that is not the end of a calendar quarter,
a proportional Profit Share will be deducted, and the amounts so deducted
will be paid to the Trading Advisor. Such amounts will not be subject to
being returned to the Trust, irrespective of subsequent losses during the
quarter.
A withdrawal from the Trading Advisor's Allocated Assets results in
a proportional decrease in any shortfall between the level of cumulative
Trading Profit as of the date of withdrawal and the highest level of
cumulative prior Trading Profit as of any calendar quarter-end (or $0, if
higher) for purposes of subsequent calculations of New Trading Profit, with
the result that redemptions, reallocations or distributions do not reduce the
Profit Shares potentially payable by the Units which remain outstanding.
Early redemption charges, organizational costs reimbursement and
extraordinary costs, such as litigation or taxes, shall not reduce Trading
Profit.
In calculating New Trading Profit, Profit Shares paid at previous
quarter-ends do not reduce cumulative New Trading Profit in subsequent
periods.
Termination of the Trading Advisor's Advisory Agreement will be
treated as if the date of termination were a calendar quarter-end for
purposes of calculating any Profit Shares due to the Trading Advisor.
The Trust will remit the Profit Shares due to the Trading Advisor
within fifteen (15) business days of the quarter-end as of which they are
due. At such time as the Trust remits each Profit Shares payment hereunder
to the Trading Advisor, the Trust shall also submit a reasonably itemized
statement setting forth the calculation of the amount of the Profit Shares
due to the Trading Advisor in respect of such quarter. If the Trading
Advisor does not object to such statement within ten (10) business days of
the receipt thereof,
such statement shall for all purposes be deemed to be conclusively correct.
C-2
Annex D
SELECTION OF
MULTIPLE PROGRAMS OFFERED
The Trading Advisor will trade the following programs for the Trust
(need not be completed if the Advisor offers a single program):
Initial % of
Program Allocated Assets
------- ----------------
----------
100%
----------
----------
The programs used by the Trading Advisor for the Trust may be changed by
written confirmation from Kenmar of the mutual agreement of Kenmar and the
Trading Advisor to such change.
D-1
ACKNOWLEDGMENT OF RECEIPT OF DISCLOSURE DOCUMENT
The undersigned hereby acknowledges receipt of the Disclosure
Document dated __________, 19__ of [TRADING ADVISOR] (the "Trading Advisor")
in connection with the Trading Advisor's management of an account for Kenmar
Global Trust.
Dated as of _______ _, 19__
KENMAR GLOBAL TRUST
By: KENMAR ADVISORY CORP.
Managing Owner
By: ___________________________
Name:
Title:
ACK-1
